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As Filed with the Securities and Exchange Commission on September 2, 1997
Registration No. 333-_______
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________
FORM S-8
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
____________________
USCS INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 94-1727009
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2969 Prospect Park Drive
Rancho Cordova, California 95670
(Address of Principal Executive Offices) (zip code)
USCS INTERNATIONAL, INC. DEFERRED COMPENSATION PLAN
USCS INTERNATIONAL, INC. BONUS DEFERRAL PLAN
(Full Title of the Plans)
MARY G. JORDAN, ESQ.
Vice President, General Counsel and Secretary
USCS INTERNATIONAL, INC.
2969 Prospect Park Drive
Rancho Cordova, California 95670-6184
916-636-4500
(Name, address and telephone number of agent for service)
With a copy to:
GILLES S. ATTIA, ESQ., Graham & James LLP
400 Capitol Mall, Suite 2400, Sacramento, California 95814
(916) 558-6700
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CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
PROPOSED PROPOSED
TITLE OF MAXIMUM MAXIMUM
SECURITIES AMOUNT OFFERING AGGREGATE AMOUNT OF
TO BE TO BE PRICE PER OFFERING REGISTRATION
REGISTERED(1) REGISTERED OBLIGATION PRICE(2) FEE
- --------------------------------------------------------------------
- --------------------------------------------------------------------
<S> <C> <C> <C> <C>
Pursuant to
USCS Deferred Comp. Plan
Obligations. . . . . . . . $10,000,000 100% $10,000,000 $3,030.30
Pursuant to
USCS Bonus Deferral
Obligations. . . . . . . . $10,000,000 100% $10,000,000 $3,030.30
Total. . . . . . . . . . . $20,000,000 100% $20,000,000 $6,060.60
</TABLE>
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- --------------------------------------------------------------------
(1) The USCS Deferred Compensation Plan Obligations and the USCS Bonus Deferral
Obligations are unsecured obligations of USCS International, Inc., to pay
deferred compensation in the future in accordance with, respectively, the
USCS International, Inc. Deferred Compensation Plan and the USCS
International, Inc., Bonus Deferral Plan.
(2) Estimated solely for the purpose of determining the registration fee.
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The document(s) containing the information specified in Part I of
Form S-8 have been or will be sent or given to participant employees as
specified by Rule 428(b)(1) under the Securities Act of 1933 (the "Act").
These documents and the documents incorporated by reference into this
Registration Statement, taken together, constitute a prospectus that meets
the requirements of Section 10(a) of the Act.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents which have heretofore been filed by USCS
International, Inc. (the "Registrant") with the Securities and Exchange
Commission (the "Commission") pursuant to the Securities Exchange Act of 1934,
as amended (the "1934 Act"), are incorporated by reference herein and shall be
deemed to be a part hereof:
(a) The Registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1996 and filed with the Commission on March
28, 1997 (the "Annual Report");
(b) All other reports filed pursuant to Section 13(a) or 15(d)
of the Act since the end of the fiscal year covered by the
Annual Report;
(c) The description of Common Stock contained in the
Registrant's Registration Statement on Form 8-A filed with the
Commission on June 18, 1996, by which the shares of Common
Stock of the Company were registered under Section 12 of
the 1934 Act.
All documents subsequently filed by the Registrant with the
Commission pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange
Act, prior to the filing of a post-effective amendment to this Registration
Statement which indicates that all securities offered hereby have been sold
or which deregisters all securities then remaining unsold, shall be deemed to
be incorporated by reference in this Registration Statement and made a part
hereof from the date of filing of such documents.
Any statement contained in a document incorporated or deemed
to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Registration Statement to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a
part of this Registration Statement.
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ITEM 4. DESCRIPTION OF SECURITIES.
The obligations (the "Obligations") under the Deferred
Compensation Plan and the Bonus Deferral Plan (the "Plans") are general
unsecured obligations of the Registrant to pay deferred compensation in the
future in accordance with the terms of the Plans, form the general assets of
the Registrant, and rank pari passu with other unsecured and unsubordinated
indebtedness of the Registrant from time to time outstanding. A brief
description of certain aspects of the Plans follows (the official provisions
of the Plans are attached as Exhibit 4.1 and 4.2 hereto, which control in the
case of a discrepancy).
Participation in the Plans is generally limited to senior
management and persons selected by the Board of Directors, in the case of the
Deferred Compensation Plan, and a Committee selected by the Board of Directors
in the case of the Bonus Deferral Plan ("Participant"). The Deferred
Compensation Plan allows a Participant to defer a portion of the Participant's
pre-tax base salary (with a minimum deferral of $5,000 per year). The Bonus
Deferral Plan allows a Participant to defer a portion of the Participant's
bonuses and other incentive compensation.
The amount deferred by each Participant is determined in
accordance with each Participant's deferral election. Each Obligation will be
payable during employment in accordance with the terms of the Plans. After
termination, a Participant will begin receiving distributions in either a lump
sum payment or five, ten or fifteen annual installment payments beginning no
later than January 15 of the plan year following the Participant's termination
date in accordance with the Participant's initial election. If a Participant
dies, the balance then credited to the Participant's account shall be
distributed to the Participant's beneficiary(s) in the same manner as if the
employee were terminated.
The amount deferred will be credited to that
Participant's account and will receive deemed interest in accordance and with
such calculation as the Registrant's Board of Directors, in its sole
discretion, may determine from time to time. The amount deferred will be
denominated and be payable in United States Dollars.
A Participant's, or any other person with rights to the
Obligations, may not sell, transfer, anticipate, assign, hypothecate, or
otherwise dispose of any right or interest under the Plans and such rights and
interest shall not at any time be subject to the claims of creditors nor be
liable to attachment, execution or other legal process.
The Registrant reserves the right to amend or terminate
the Plans at any time, except that no such amendment or termination shall
adversely affect a Participant's right to the Obligations in the amount of
the Participant's account as of the date of such amendment or termination.
The Obligations are not convertible into another security
of the Registrant. The Obligations will not have the benefit of a negative
pledge or any other affirmative or negative covenant on the part of the
Registrant. No trustee has been appointed having the authority to take
action with respect to the Obligations and each Participant will be
responsible for acting independently with respect to, among other things, the
giving of notices, responding to any requests for consents, waivers or
amendments pertaining to the Obligations and taking action upon default.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
None.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law
authorizes a court to award, or a corporation's Board of Directors to grant,
indemnity to directors and officers in terms sufficiently broad to permit
such indemnification under certain circumstances for liabilities (including
reimbursement for expenses incurred) arising under the 1933 Act.
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The Company's Second Amended and Restated Certificate of
Incorporation (the "Certificate of Incorporation") and Bylaws provide for
expanded indemnification of directors and officers of the Company and limit
the liability of directors of the Company. The Bylaws provide that the
Company shall indemnify each person who is or was an officer or director of
the Company, or is or was serving as an officer, director, employee or agent
of any other corporation, partnership, joint venture, trust or other
enterprise at the request of the Company, against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement (if such
settlement is approved in advance by the Company, which approval shall not be
unreasonably withheld) actually and reasonably incurred by him or her in
connection with such action, suit or proceeding if he or she acted in good
faith and in a manner he or she believed to be in or not opposed to the best
interests of the Company, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his or her conduct was
unlawful. Such right to indemnification includes the right to advancement of
expenses incurred by such person prior to final disposition of the
proceeding, provided that such director or officer shall provide the Company
with an undertaking to repay all amounts so advanced if it shall ultimately
be determined by final judicial decision that such person is not entitled to
be indemnified for such expenses. The Bylaws also provide that the Company
shall indemnify any person who was or is a party or is threatened to be made
a party to any threatened, pending or completed action or suit by or in the
right of the Company to procure a judgment in its favor by reason of the fact
that he or she is or was a director, officer, employee or agent of the
Company, or is or was serving at the request of the company as a director,
officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses (including attorneys'
fees) actually and reasonably incurred by him or her in connection with the
defense or settlement of such action or suit, if he or she acted in good
faith and in a manner he or she reasonably believed to be in or not opposed
to the best interests of the Company, except that no indemnification shall be
made in respect to any claim, issue or matter as to which such person shall
have been adjudged to be liable to the Company unless and only to the extent
that the Delaware Court of Chancery or the court in which such action or suit
was brought shall determine upon application that, despite the adjudication
of liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which the
Delaware Court of Chancery or such other court shall deem proper. No person
shall be indemnified by the Court for any expenses or amounts paid in
settlement with respect to any action to recover short-swing profits under
Section 16(b) of the Securities Exchange Act of 1934, as amended. The
Certificate of Incorporation provides that if the Delaware General
Corporation Law is amended to further eliminate or limit the personal
liability of directors, then the liability of a director of the Company shall
be eliminated or limited to the fullest extent permitted by the Delaware
General Corporation Law, as so amended. The Company has also entered into
agreements to indemnify its officers and directors in addition to the
indemnification provided for in the Company's Bylaws.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
The following exhibits are filed with this Registration
Statement.
NUMBER DESCRIPTION OF EXHIBIT
4.1 USCS International, Inc. Bonus Deferral Plan
4.2 U.S. Computer Services Deferred Compensation Plan
5.1 Opinion of Graham & James LLP regarding the
legality of the securities being registered
herein
23.1 Consent of Graham & James LLP (incorporated by
reference to Exhibit 5.1 hereof).
3
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23.2 Consent of Price Waterhouse LLP.
24.1 Power of Attorney (see signature page).
ITEM 9. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes to file, during any
period in which offers or sales are being made, a post-effective amendment to
this registration statement:
(i) to include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or the aggregate,
represent a fundamental change in the information set forth in the
Registration Statement;
(iii) to include any material information with respect to the
plan of distribution not previously disclosed in the registration statement
or any material change to such information in the registration statement;
PROVIDED, HOWEVER, that paragraphs (1)(i) and (1)(ii) do not apply if the
registration statement is on Form S-3 or Form S-8 and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed by the Registrant pursuant to Section 13
or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated
by reference in the registration statement.
(b) The undersigned Registrant hereby undertakes that, for the
purpose of determining any liability under the Securities Act of 1933, each
such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of
such securities at that time to be the initial bona fide offering.
(c) The undersigned Registrant hereby undertakes to remove from
registration by means of a post-effective amendment any of the securities
being registered which remain unsold at the termination of the offering.
(d) The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of 1933, each
filing of the Registrant's annual report pursuant to Section 13(a) or Section
15(d) of the Securities Exchange Act of 1934 (and, where applicable, each
filing of an employee benefit plan's annual report pursuant to Section 15(d)
of the Securities Exchange Act of 1934) that is incorporated by reference in
the registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(e) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the Delaware Corporation
Law, the Certificate of Incorporation of the registrant, the Bylaws of
Registrant and the indemnification agreements described above in Item 6,
Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
Registrant of expenses incurred or paid by a director, officer or controlling
person of Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question of
whether such indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such issue.
4
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Rancho Cordova, County of
Sacramento, State of California, on the 29th day of August, 1997.
USCS INTERNATIONAL, INC.
By: /Mary G. Jordan/
--------------------------------------
Mary G. Jordan
Vice President, General Counsel and
Secretary
5
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POWER OF ATTORNEY
for Form S-8 for the USCS Deferred Compensation Plan and the USCS Bonus
Deferral Plan
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose
signature appears below hereby constitutes and appoints Mary G. Jordan and
Douglas L. Shurtleff, and each of them, his true and lawful attorneys-in-fact
and agents, each with full power of substitution, each with power to act
alone, to sign and execute on behalf of the undersigned any amendment or
amendments to this Registration Statement and to perform any acts necessary
in order to file the same, with exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission; and each
of the undersigned does hereby ratify and confirm all that said
attorneys-in-fact and agents, or their or his substitutes, shall do or cause
to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates stated.
Dated: July 30, 1997 / James C. Castle/
-----------------------------------------
James C. Castle
Chief Executive Officer and Chairman of the Board
of Directors
(Principal Executive Officer)
Dated: July 30, 1997 / George L. Argyros, Sr./
-----------------------------------------
George L. Argyros, Sr.
Director
Dated: July 30, 1997 / George M. Crandell, Jr./
-----------------------------------------
George M. Crandell, Jr.
Director
Dated: July 30, 1997 / Charles D. Martin/
-----------------------------------------
Charles D. Martin
Director
Dated: July 30, 1997 / Michael F. McGrail/
-----------------------------------------
Michael F. McGrail
Director
Dated: July 30, 1997 / Larry W. Wangberg/
-----------------------------------------
Larry W. Wangberg
Director
Dated: July 30, 1997 / Douglas L. Shurtleff/
-----------------------------------------
Douglas L. Shurtleff
Senior Vice-President of Finance and
Chief Financial Officer (Principal Financial
Officer)
- A N D -
<PAGE>
Dated: July 30, 1997 / Zaida A. Klein/
-----------------------------------------
Zaida A. Klein
Chief Accounting Officer and Controller
(Principal Accounting Officer)
<PAGE>
INDEX TO EXHIBITS
NUMBER DESCRIPTION OF EXHIBIT
4.1 USCS International, Inc. Bonus Deferral Plan
4.2 U.S. Computer Services Deferred Compensation Plan
5.1 Opinion of Graham & James LLP regarding
legality of the shares of Common Stock.
23.1 Consent of Graham & James LLP
(incorporated by reference to
Exhibit 5.1 hereof).
23.2 Consent of Price Waterhouse LLP.
24.1 Power of Attorney (see signature page).
<PAGE>
USCS INTERNATIONAL, INC.
BONUS DEFERRAL PLAN
TABLE OF CONTENTS
Page
SECTION 1 DEFINITIONS
1.1 "Affiliate" ................................................ 1
1.2 "Beneficiary" .............................................. 1
1.3 "Board of Directors" ....................................... 2
1.4 "Code" ..................................................... 2
1.5 "Committee" ................................................ 2
1.6 "Company" .................................................. 2
1.7 "Compensation" ............................................. 2
1.8 "Compensation Deferrals" ................................... 2
1.9 "Disability" ............................................... 3
1.10 "Eligible Employee" ....................................... 3
1.11 "Employers" ............................................... 3
1.12 "ERISA" ................................................... 3
1.13 "Participant" ............................................. 4
1.14 "Participant's Account" or "Account" ...................... 4
1.15 "Plan" .................................................... 4
1.16 "Plan Year" ............................................... 4
SECTION 2 PARTICIPATION
2.1 Participation .............................................. 4
2.1.1 Elections by Eligible Employees ..................... 4
2.1.2 No Election Changes ................................. 5
2.1.3 Specific Timing and Method of Election .............. 5
2.2 Hardship Suspension of Participation ....................... 5
2.3 Termination of Participation ............................... 5
SECTION 3 COMPENSATION DEFERRAL ELECTIONS
3.1 Compensation Deferrals ..................................... 6
3.2 Crediting of Compensation Deferrals ........................ 6
3.3 Deemed Investment Return ................................... 7
3.4 Form of Payment ............................................ 7
3.5 In-Service Withdrawals ..................................... 8
SECTION 4 ACCOUNTING
4.1 Participants' Accounts ..................................... 9
4.2 Participants Remain Unsecured Creditors .................... 9
4.3 Accounting Methods ......................................... 9
4.4 Reports .................................................... 9
SECTION 5 DISTRIBUTIONS
5.1 Normal Time for Distribution ............................... 10
5.1.1 Termination Date .................................... 10
5.1.2 Rules for Installment Payments ...................... 10
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5.2 Special Rule for Disability ................................ 11
5.3 Death of the Participant ................................... 11
5.4 Beneficiary Designations ................................... 11
5.4.1 Changes.............................................. 11
5.4.2 Failed Designations.................................. 12
5.5 Financial Hardship.......................................... 12
5.6 Payments to Incompetents.................................... 13
5.7 Undistributable Accounts.................................... 13
5.8 Committee Discretion........................................ 14
SECTION 6 PARTICIPANT'S INTEREST IN ACCOUNT
6.1 Compensation Deferral Contributions......................... 14
SECTION 7 ADMINISTRATION OF THE PLAN
7.1 Plan Administrator.......................................... 14
7.2 Committee................................................... 14
7.3 Actions by Committee........................................ 14
7.4 Powers of Committee......................................... 15
7.5 Decisions of Committee...................................... 17
7.6 Administrative Expenses..................................... 17
7.7 Eligibility to Participate.................................. 17
7.8 Indemnification............................................. 17
SECTION 8 FUNDING
8.1 Unfunded Plan............................................... 18
SECTION 9 MODIFICATION OR TERMINATION OF PLAN
9.1 Employers' Obligations Limited.............................. 18
9.2 Right to Amend or Terminate................................. 18
9.3 Disposition of Affiliates................................... 19
9.4 Effect of Termination....................................... 19
SECTION 10 GENERAL PROVISIONS
10.1 Participation by Affiliates................................. 20
10.2 Inalienability.............................................. 20
10.3 Rights and Duties........................................... 21
10.4 No Enlargement of Employment Rights......................... 21
10.5 Apportionment of Costs and Duties........................... 21
10.6 Compensation Deferrals Not Counted Under Other
Employee Benefit Plans...................................... 21
10.7 Applicable Law.............................................. 22
10.8 Severability................................................ 22
10.9 Captions.................................................... 22
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USCS INTERNATIONAL, INC.
BONUS DEFERRAL PLAN
(EFFECTIVE JANUARY 1, 1997)
USCS INTERNATIONAL, INC., a Delaware corporation, hereby
establishes the USCS International, Inc. Bonus Deferral Plan, effective
January 1, 1997, for the benefit of a select group of management employees of
the Company and its participating Affiliates, in order to provide such
employees with certain deferred compensation benefits. The Plan is an
unfunded deferred compensation plan that is intended to qualify for the
exemptions provided in sections 201, 301, and 401 of ERISA.
SECTION 1
DEFINITIONS
The following words and phrases shall have the following meanings
unless a different meaning is plainly required by the context:
1.1 "AFFILIATE" shall mean (a) the Company, and (b) each
corporation, trade or business which is, together with any Employer, a member
of a controlled group of corporations or an affiliated service group or under
common control (within the meaning of section 414(b), (c) or (m) of the
Code), but only for the period during which such other entity is so
affiliated with any Employer.
1.2 "BENEFICIARY" shall mean the person or persons entitled to
receive the balance credited to a Participant's
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Account under the Plan upon the death of the Participant, as provided in
Section 5.4.
1.3 "BOARD OF DIRECTORS" shall mean the Board of Directors of the
Company, as constituted from time to time.
1.4 "CODE" shall mean the Internal Revenue Code of 1986, as
amended. Reference to a specific section of the Code shall include such
section, any valid regulation promulgated thereunder, and any comparable
provision of any future legislation amending, supplementing or superseding
such section.
1.5 "COMMITTEE" shall mean the committee appointed by the Board of
Directors to administer the Plan. The members of the Committee shall serve
at the pleasure of the Board of Directors.
1.6 "COMPANY" shall mean USCS International, Inc., a Delaware
corporation.
1.7 "COMPENSATION" shall mean a Participant's bonuses and other
incentive compensation (if any) eligible to be deferred under the Plan. The
Committee, in its discretion, shall from time to time designate the types of
bonuses and other incentive compensation which shall be eligible for deferral
under the Plan. A Participant's Compensation shall not include any other
type of remuneration.
1.8 "COMPENSATION DEFERRALS" shall mean the amounts credited to
Participants' Accounts under the Plan pursuant to their deferral elections
made in accordance with Section 2.1.
1.9 "DISABILITY" or "DISABLED" shall mean a physical or mental
impairment that renders a Participant incapable of performing the functions
of his or her position for a period of
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one year. A Participant shall be Disabled only if he or she is determined to
be disabled by a third party or parties designated from time to time by the
Committee.
1.10 "ELIGIBLE EMPLOYEE" shall mean an employee of an Employer who
has been designated by the Committee (in its discretion) as eligible to
participate in the Plan. For this purpose, the Committee may designate
employees on an individual by individual basis and/or pursuant to such
procedures or criteria as it may establish from time to time. An employee who
is an Eligible Employee for a given Plan Year in no way is guaranteed or
assured of being selected as an Eligible Employee for any subsequent Plan Year
or Plan Years.
1.11 "EMPLOYERS" shall mean the Company and each of its Affiliates
that adopts the Plan with the approval of the Board of Directors. With respect
to an individual Participant, "EMPLOYER" shall mean the Company or its
Affiliate that (a) directly employs such Participant, and (b) has adopted the
Plan (with the approval of the Board of Directors).
1.12 "ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended. Reference to a specific section of ERISA shall include
such section, any valid regulation promulgated thereunder, and any comparable
provision of any future legislation amending, supplementing or superseding such
section.
1.13 "PARTICIPANT" shall mean an Eligible Employee who (a) has
become a Participant in the Plan pursuant to Section 2.1 and (b) has not ceased
to be a Participant pursuant to Section 2.3.
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1.14 "PARTICIPANT'S ACCOUNT" or "ACCOUNT" shall mean as to any
Participant the separate account maintained on the books of the Employers in
order to reflect his or her interest under the Plan.
1.15 "PLAN" shall mean the USCS International, Inc. Bonus Deferral
Plan, as set forth in this instrument and as hereafter amended from time to
time.
1.16 "PLAN YEAR" shall mean the calendar year.
SECTION 2
PARTICIPATION
2.1 PARTICIPATION. Each Eligible Employee's decision to become a
Participant shall be entirely voluntary.
2.1.1 ELECTIONS BY ELIGIBLE EMPLOYEES. An Eligible Employee
may elect to become a Participant (or to continue or reinstate his or her
active participation) in the Plan for any Plan Year by electing to make
Compensation Deferrals under the Plan. An election under this Section 2.1.1 to
make Compensation Deferrals shall be effective only for the Plan Year with
respect to which the election is made.
2.1.2 NO ELECTION CHANGES. A Participant shall not be
permitted to change or revoke his or her election for a Plan Year after such
election has been made, except that (a) to the limited extent provided in
Section 2.2, a Participant may change or revoke his or her election, and (b) if
a Participant's job changes to a position which is ineligible for the Plan, his
or her deferrals under the Plan shall cease.
2.1.3 SPECIFIC TIMING AND METHOD OF ELECTION.
4
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Notwithstanding any contrary provision of this Section 2.1, the Committee, in
its sole discretion, shall determine the manner and deadlines for
Participants to make Compensation Deferral elections. Such manner and
deadlines may differ from Eligible Employee to Eligible Employee and from
time to time, as determined by the Committee.
2.2 HARDSHIP SUSPENSION OF PARTICIPATION. In the event that a
Participant incurs a financial hardship, the Committee, in its sole discretion,
may suspend the Participant's Compensation Deferrals. However, an election to
make Compensation Deferrals under Section 2.1 shall be irrevocable as to
amounts deferred as of the effective date of any suspension in accordance with
this Section 2.2. For purposes of the Plan, a "financial hardship" shall mean
a severe financial emergency which is caused by a sudden and unexpected
accident, illness or other event beyond the control of the Participant which
would, if no suspension of deferrals (or accelerated distribution under Section
5.5 were made), result in severe financial hardship to the Participant or a
member of his or her immediate family.
2.3 TERMINATION OF PARTICIPATION. An Eligible Employee who has
become a Participant shall remain a Participant until his or her entire vested
Account balance is distributed. However, an individual who has become a
Participant may or may not be an Eligible Employee making Compensation
Deferrals for a particular Plan Year, depending upon whether he or she (a) then
meets the definition of Eligible Employee, or (b) has elected to make
Compensation Deferrals for such Plan Year.
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SECTION 3
COMPENSATION DEFERRAL ELECTIONS
3.1 COMPENSATION DEFERRALS. At the times and in the manner
prescribed in Section 2.1, each Eligible Employee may elect to defer portions
of his or her Compensation and to have the amounts of such deferrals credited
to his or her Account under the Plan on the books of the Employer. For each
Plan Year, an Eligible Employee may elect to defer an amount equal to any
whole percentage or specific dollar amount (in whole dollar increments) of
the Participant's Compensation, provided that the Committee, in its
discretion and from time to time, may establish more restrictive rules
regarding permissible deferral elections (E.G., but not by way of limitation,
permitting deferral elections only in increments of five percent).
Notwithstanding any contrary provision of the Plan, the Committee may reduce
a Participant's Compensation Deferrals to the extent necessary to satisfy
applicable withholding tax requirements and employee welfare plan
contributions.
3.2 CREDITING OF COMPENSATION DEFERRALS. The amounts deferred
pursuant to Section 3.1 shall reduce the Participant's Compensation during
the Plan Year and shall be credited to the Participant's Account as of a date
which is no later than five business days after such amounts otherwise would
have been paid to the Participant, as determined by the Committee. For each
Plan Year, the exact dollar amount to be deferred from each Compensation
payment shall be determined by the Committee under such formulae as it shall
adopt from time to time.
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3.3 DEEMED INVESTMENT RETURN ON ACCOUNTS. Although no assets will
be segregated or otherwise set aside with respect to a Participant's Account,
the amount that is ultimately payable to the Participant with respect to his or
her Account shall be determined as if such Account had been invested in such
manner as the Committee, in its discretion, may specify from time to time. The
Committee, in its sole discretion, shall adopt (and may modify from time to
time) such rules and procedures as it deems necessary or appropriate to
implement the deemed investment of the Participants' Accounts. Such procedures
generally shall provide that a Participant shall be entitled to make deemed
investment elections as to the deemed investment of his or her Account.
However, such procedures may differ among Participants or classes of
Participants, as determined by the Committee in its discretion.
3.4 FORM OF PAYMENT. Each Participant shall indicate on his or her
first deferral election made pursuant to Section 3.1 the form of payment for
his or her Account. A Participant may elect (a) a lump sum payment, (b) five
annual installment payments, (c) ten annual installment payments, or
(d) fifteen annual installment payments. On any subsequent deferral election
(I.E., an election for a subsequent Plan Year), each Participant may choose a
different form of payment (from the above choices); provided, however, that a
Participant may not choose a more rapid form of payment. A Participant's last
effective election shall apply to all amounts credited to the Participant's
Account, without regard to the Plan Year in which such amounts are credited.
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3.5 IN-SERVICE WITHDRAWALS. Notwithstanding any contrary provision
of the Plan, and pursuant to such procedures as the Committee may adopt from
time to time, a Participant may indicate on his or her deferral election (made
pursuant to Section 3.1) the time for payment of all or a portion of the
Compensation Deferrals to be made for the specific Plan Year covered by such
deferral election. Payment of such deferrals (as increased or decreased by any
deemed earnings or losses) will be made in four equal installments, commencing
on the date elected by the Participant. A Participant may elect to commence
receiving payment of such deferrals after any whole number of calendar years
(not less than five) specified by the Participant in his or her deferral
election. A Participant's election as to the time for commencement of payment
shall be irrevocable and shall apply to the elected portion of the amounts
credited to the Participant's Account during the Plan Year with respect to
which the election is made.
SECTION 4
ACCOUNTING
4.1 PARTICIPANTS' ACCOUNTS. At the direction of the Committee,
there shall be established and maintained on the books of the Employer, a
separate Account for each Participant to which shall be credited all
Compensation Deferrals made by the Participant, and deemed investment returns,
gains and losses on such Compensation Deferrals.
4.2 PARTICIPANTS REMAIN UNSECURED CREDITORS. All amounts credited
to a Participant's Account under the Plan shall
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continue for all purposes to be a part of the general assets of the Employer.
Each Participant's interest in the Plan shall make him or her only a
general, unsecured creditor of the Employer.
4.3 ACCOUNTING METHODS. The accounting methods or formulae to be
used under the Plan for the purpose of maintaining the Participants' Accounts,
including the calculation and crediting of deemed returns, gains and losses,
shall be determined by the Committee, in its sole discretion. The accounting
methods or formulae selected by the Committee may be revised from time to time.
4.4 REPORTS. Each Participant shall be furnished with periodic
statements of his or her Account, reflecting the status of his or her interest
in the Plan, at least annually.
SECTION 5
DISTRIBUTIONS
5.1 NORMAL TIME FOR DISTRIBUTION. Subject to Sections 5.2 and 5.3,
distribution of the balance credited to a Participant's Account shall commence
no later than January 15 of the Plan Year following the Participant's
"termination date" (as defined in Section 5.1.1).
5.1.1 TERMINATION DATE. A Participant's "termination date"
means the date of the Participant's termination of employment with all
Employers and Affiliates for any reason, except as provided in the following
sentence. However, if (a) the Participant's termination of employment with all
Employers and Affiliates occurs on account of the sale of the stock or assets
of the Affiliate employing the Participant, or
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due to a spin-off, split-up or other similar change in the capital structure
of the Affiliate, and (b) the Participant continues in employment with the
new non-Affiliate (or its successor), then the Participant's "termination
date" means the date of the Participant's termination of employment for any
reason from such non-Affiliate.
5.1.2 RULES FOR INSTALLMENT PAYMENTS. If, pursuant to Section
3.4, the Participant elected to receive five, ten or fifteen annual installment
payments, his or her first installment shall be equal to 1/5th, 1/10th, or
1/15th (respectively) of the balance then credited to his or her Account. Each
subsequent annual installment shall be paid to the Participant as near as
administratively practicable to each anniversary of the first installment
payment. The amount of each subsequent installment shall be equal to the
balance then credited to the Participant's Account, divided by the number of
installments remaining to be made. While a Participant's Account is in
installment payout status, the unpaid balance credited to the Participant's
Account shall continue to be credited with deemed returns, gains and losses
under Section 3.3.
5.2 SPECIAL RULE FOR DISABILITY. If a Participant becomes Disabled
prior to his or her termination of employment with all Employers and
Affiliates, the balance then credited to his or her Account shall be
distributed to him or her at the time specified in Section 5 and in the form
and manner elected under Section 3.4.
5.3 DEATH OF THE PARTICIPANT. If a Participant dies, the balance
then credited to his or her Account shall be
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distributed to his or her Beneficiary or Beneficiaries, in the same form and
manner elected by the Participant under Section 3.4.
5.4 BENEFICIARY DESIGNATIONS. Each Participant may, pursuant to
such procedures as the Committee may specify, designate one or more
Beneficiaries. Primary and secondary Beneficiaries are permitted.
5.4.1 CHANGES. A Participant may designate different
Beneficiaries (or may revoke a prior Beneficiary designation) at any time by
delivering a new designation (or revocation of a prior designation) in like
manner. Any designation or revocation shall be effective only if it is
received by the Committee. However, when so received, the designation or
revocation shall be effective as of the date the notice is executed (whether or
not the Participant still is living), but without prejudice to the Committee on
account of any payment made before the change is recorded. The last effective
designation received by the Committee shall supersede all prior designations.
5.4.2 FAILED DESIGNATIONS. If a Participant dies without
having effectively designated a Beneficiary, or if no Beneficiary (primary or
secondary) survives the Participant, the Participant's Account shall be payable
to his or her surviving spouse, or, if the Participant is not survived by his
or her spouse, the Account shall be paid to his or her estate.
5.5 FINANCIAL HARDSHIP. In the event that a Participant incurs a
"financial hardship" (as defined in Section 2.2), the Committee, in its sole
discretion and notwithstanding
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any contrary provision of the Plan, may determine that all or part of the
Participant's Account shall be paid to him or her immediately; provided,
however, that the amount paid to the Participant pursuant to this Section 5.5
shall be limited to the amount reasonably necessary to alleviate the
Participant's hardship. Also, payment under this Section 5.5 may not be made
to the extent that the hardship may be relieved by suspension of the
Participant's Compensation Deferrals in accordance with Section 2.2.
5.6 PAYMENTS TO INCOMPETENTS. If any individual to whom a benefit
is payable under the Plan is a minor or legally incompetent, the Committee
shall determine whether payment shall be made directly to the individual, any
person acting as his or her custodian or legal guardian under the California
Uniform Transfers to Minors Act, his or her legal representative or a near
relative, or directly for his or her support, maintenance or education.
5.7 UNDISTRIBUTABLE ACCOUNTS. Each Participant and (in the event of
death) his or her Beneficiary shall keep the Committee advised of his or her
current address. If the Committee is unable to locate the Participant or
Beneficiary to whom a Participant's Account is payable under this Section 5,
the Participant's Account shall continue to be credited with deemed returns,
gains and losses in accordance with Section 3.3. Accounts that, in accordance
with the preceding sentence, have been undistributable for a period of 35
months shall be forfeited as of the end of the 35th month. If a Participant
whose Account was forfeited under this Section 5.7 (or his or her Beneficiary)
12
<PAGE>
files a claim for distribution of the Account after the date that it was
forfeited, and if the Committee determines that such claim is valid, then the
forfeited balance shall be paid by the Employer in a lump sum cash payment as
soon as practicable thereafter.
5.8 COMMITTEE DISCRETION. Within the specific time periods
described in this Section 5, the Committee shall have sole discretion to
determine the specific timing of the payment of any Account balance under the
Plan.
SECTION 6
PARTICIPANT'S INTEREST IN ACCOUNT
6.1 COMPENSATION DEFERRAL CONTRIBUTIONS. Subject to Sections 8.1
(relating to creditor status) and 9.2 (relating to amendment and/or termination
of the Plan), a Participant's interest in the balance credited to his or her
Account at all times shall be 100% vested and nonforfeitable.
SECTION 7
ADMINISTRATION OF THE PLAN
7.1 PLAN ADMINISTRATOR. The Company is hereby designated as the
administrator of the Plan (within the meaning of section 3(16)(A) of ERISA).
7.2 COMMITTEE. The Plan shall be administered by the Committee.
The Committee shall have the authority to control and manage the operation and
administration of the Plan. Any member of the Committee may resign at any time
by notice in writing mailed or delivered to the Secretary of the Company.
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7.3 ACTIONS BY COMMITTEE. Each decision of a majority of the
members of the Committee then in office shall constitute the final and binding
act of the Committee. The Committee may act with or without a meeting being
called or held and shall keep minutes of all meetings held and a record of all
actions taken by written consent.
7.4 POWERS OF COMMITTEE. The Committee shall have all powers and
discretion necessary or appropriate to supervise the administration of the Plan
and to control its operation in accordance with its terms, including, but not
by way of limitation, the following discretionary powers:
(a) To interpret and determine the meaning and validity of the
provisions of the Plan and to determine any question arising under, or in
connection with, the administration, operation or validity of the Plan or
any amendment thereto;
(b) To determine the types of bonuses which shall be eligible for
deferral under the Plan;
(c) To determine any and all considerations affecting the
eligibility of any employee to become a Participant or remain a
Participant in the Plan;
(d) To cause one or more separate Accounts to be maintained for each
Participant;
(e) To cause Compensation Deferrals and deemed returns, gains and
losses to be credited to Participants' Accounts;
(f) To establish and revise a method or procedure for the deemed
investment of Participants' Accounts, as provided
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in Section 3.3;
(g) To establish and revise an accounting method or formula for the
Plan, as provided in Section 4.3;
(h) To determine the manner and form in which any distribution is to
be made under the Plan;
(i) To determine the status and rights of Participants and their
spouses, Beneficiaries or estates;
(j) To employ such counsel, agents and advisers, and to obtain such
legal, clerical and other services, as it may deem necessary or
appropriate in carrying out the provisions of the Plan;
(k) To establish, from time to time, rules for the performance of
its powers and duties and for the administration of the Plan;
(l) To arrange for annual distribution to each Participant of a
statement of benefits accrued under the Plan;
(m) To publish a claims and appeal procedure satisfying the minimum
standards of section 503 of ERISA pursuant to which individuals or estates
may claim Plan benefits and appeal denials of such claims;
(n) To delegate to any one or more of its members or to any other
person, severally or jointly, the authority to perform for and on behalf
of the Committee one or more of the functions of the Committee under the
Plan; and
(o) To decide all issues and questions regarding Account balances,
and the time, form, manner and amount of distributions to Participants.
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7.5 DECISIONS OF COMMITTEE. All actions, interpretations, and
decisions of the Committee shall be conclusive and binding on all persons, and
shall be given the maximum possible deference allowed by law.
7.6 ADMINISTRATIVE EXPENSES. All expenses incurred in the
administration of the Plan by the Committee, or otherwise, including legal fees
and expenses, shall be paid and borne by the Employers.
7.7 ELIGIBILITY TO PARTICIPATE. No member of the Committee who is
also an employee of an Employer shall be excluded from participating in the
Plan if otherwise eligible, but he or she shall not be entitled, as a member of
the Committee, to act or pass upon any matters pertaining specifically to his
or her own Account under the Plan.
7.8 INDEMNIFICATION. Each of the Employers shall, and hereby does,
indemnify and hold harmless the members of the Committee, from and against any
and all losses, claims, damages or liabilities (including attorneys' fees and
amounts paid, with the approval of the Board of Directors, in settlement of any
claim) arising out of or resulting from the implementation of a duty, act or
decision with respect to the Plan, so long as such duty, act or decision does
not involve gross negligence or willful misconduct on the part of any such
individual.
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SECTION 8
FUNDING
8.1 UNFUNDED PLAN. All amounts credited to a Participant's Account
under the Plan shall continue for all purposes to be a part of the general
assets of the Employer. The interest of the Participant in his or her Account,
including his or her right to distribution thereof, shall be an unsecured claim
against the general assets of the Employer. Nothing contained in the Plan
shall give any Participant or beneficiary any interest in or claim against any
specific assets of the Employer.
SECTION 9
MODIFICATION OR TERMINATION OF PLAN
9.1 EMPLOYERS' OBLIGATIONS LIMITED. The Employers intend to
continue the Plan indefinitely, and to maintain each Participant's Account
until it is scheduled to be paid to him or her in accordance with the
provisions of the Plan. However, the Plan is voluntary on the part of the
Employers, and the Employers do not guarantee to continue the Plan. The
Company at any time may, by amendment of the Plan, suspend Compensation
Deferrals or may discontinue Compensation Deferrals, with or without cause.
Complete discontinuance of all Compensation Deferrals shall be deemed a
termination of the Plan.
9.2 RIGHT TO AMEND OR TERMINATE. The Board of Directors reserves
the right to alter, amend or terminate the Plan, or any part thereof, in such
manner as it may determine, at any time and for any reason.
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9.3 DISPOSITION OF AFFILIATES. Notwithstanding any contrary
provision of the Plan, in the event that one or more Participants transfer
employment to a non-Affiliate pursuant to an agreement regarding the sale of
the stock or assets of an Affiliate, or a spin-off, split-up or other change in
the capital structure of an Affiliate (each, an "affected Participant"), the
Board of Directors, in its sole discretion, may determine that (a) the
liability for amounts credited to an affected Participant's Account shall be
assigned or transferred to such non-Affiliate (or an affiliate thereof), and
upon acceptance by the non-Affiliate (or affiliate thereof) of such liability,
no Employer shall have any liability under the Plan to such affected
Participant, or (b) the amounts credited to an affected Participant's Account
shall be distributed to him or her (in a single lump sum) no later than January
15 of the Plan Year following the affected Participant's termination of
employment with all Employers and Affiliates.
9.4 EFFECT OF TERMINATION. If the Plan is terminated pursuant to
this Section 9, the balances credited to the Accounts of the affected
Participants shall be distributed to them at the time and in the manner set
forth in Section 5; provided, however, that the Committee, in its sole
discretion, may authorize accelerated distribution of Participants' Accounts as
of any earlier date.
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SECTION 10
GENERAL PROVISIONS
10.1 PARTICIPATION BY AFFILIATES. One or more Affiliates of the
Company may become participating Employers by adopting the Plan and obtaining
approval for such adoption from the Board of Directors. By adopting the
Plan, an Affiliate shall be deemed to agree to all of its terms, including
(but not limited to) the provisions granting exclusive authority (a) to the
Board of Directors to amend the Plan, and (b) to the Committee to administer
and interpret the Plan. Any Affiliate may terminate its participation in the
Plan at any time. The liabilities incurred under the Plan to the
Participants employed by each Employer shall be solely the liabilities of
that Employer, and no other Employer shall be liable for benefits accrued by
a Participant during any period when he or she was not employed by such
Employer. A list of participating Employers, and the effective dates of
their participation, is attached hereto as Appendix A.
10.2 INALIENABILITY. In no event may either a Participant, a
former Participant or his or her Beneficiary, spouse or estate sell,
transfer, anticipate, assign, hypothecate, or otherwise dispose of any right
or interest under the Plan; and such rights and interests shall not at any
time be subject to the claims of creditors nor be liable to attachment,
execution or other legal process. Accordingly, for example, a Participant's
interest in the Plan is not transferable pursuant to a domestic relations
order.
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10.3 RIGHTS AND DUTIES. Neither the Employers nor the Committee
shall be subject to any liability or duty under the Plan except as expressly
provided in the Plan, or for any action taken, omitted or suffered in good
faith.
10.4 NO ENLARGEMENT OF EMPLOYMENT RIGHTS. Neither the
establishment or maintenance of the Plan, the making of any Compensation
Deferrals nor any action of any Employer or the Committee, shall be held or
construed to confer upon any individual any right to be continued as an
employee of the Employer nor, upon dismissal, any right or interest in any
specific assets of the Employers other than as provided in the Plan. Each
Employer expressly reserves the right to discharge any employee at any time.
10.5 APPORTIONMENT OF COSTS AND DUTIES. All acts required of the
Employers under the Plan may be performed by the Company for itself and its
Affiliates, and the costs of the Plan may be equitably apportioned by the
Committee among the Company and the other Employers. Whenever an Employer is
permitted or required under the terms of the Plan to do or perform any act,
matter or thing, it shall be done and performed by any officer or employee of
the Employer who is thereunto duly authorized by the board of directors of
the Employer.
10.6 COMPENSATION DEFERRALS NOT COUNTED UNDER OTHER EMPLOYEE
BENEFIT PLANS. Compensation Deferrals under the Plan will not be considered
for purposes of contributions or benefits under any other employee benefit
plan sponsored by the Employers.
10.7 APPLICABLE LAW. The provisions of the Plan shall be
construed, administered and enforced in accordance with ERISA,
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and to the extent not preempted by ERISA, with the laws of the State of
California.
10.8 SEVERABILITY. If any provision of the Plan is held invalid or
unenforceable, its invalidity or unenforceability shall not affect any other
provisions of the Plan, and in lieu of each provision which is held invalid
or unenforceable, there shall be added as part of the Plan a provision that
shall be as similar in terms to such invalid or unenforceable provision as
may be possible and be valid, legal, and enforceable.
10.9 CAPTIONS. The captions contained in and the table of contents
prefixed to the Plan are inserted only as a matter of convenience and for
reference and in no way define, limit, enlarge or describe the scope or
intent of the Plan nor in any way shall affect the construction of any
provision of the Plan.
EXECUTION
IN WITNESS WHEREOF, USCS International, Inc., by its duly authorized
officer, has executed this Plan on the date indicated below.
USCS INTERNATIONAL, INC.
Dated: August 11, 1997 By: /James C. Castle/
Title: Chairman & CEO
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APPENDIX A
LIST OF PARTICIPATING EMPLOYERS
EMPLOYER EFFECTIVE DATE OF PARTICIPATION
1. USCS International, Inc. January 1, 1997
2. International Billing Services, Inc. January 1, 1997
3. CableData, Inc. January 1, 1997
<PAGE>
U.S. COMPUTER SERVICES
DEFERRED COMPENSATION PLAN
TABLE OF CONTENTS
Page
SECTION 1 DEFINITIONS
1.1 "Affiliate" 1
1.2 "Beneficiary" 1
1.3 "Board of Directors" 2
1.4 "Code" 2
1.5 "Committee" 2
1.6 "Company" 2
1.7 "Compensation" 2
1.8 "Compensation Deferrals" 3
1.9 "Disability" 3
1.10 "Eligible Employee" 3
1.11 "Employers" 3
1.12 "ERISA" 4
1.13 "Participant" 4
1.14 "Participant's Account" or "Account" 4
1.15 "Plan" 4
1.16 "Plan Year" 4
SECTION 2 PARTICIPATION
2.1 Participation 4
2.1.1 Initial Elections by Current Employees 5
2.1.2 Initial Elections by New Eligible
Employees 5
2.1.3 Elections for Subsequent Plan Years 5
2.1.4 No Election Changes During Plan Year 6
2.1.5 Specific Timing and Method of Election 6
2.2 Hardship Suspension of Participation 7
2.3 Termination of Participation 7
SECTION 3 COMPENSATION DEFERRAL ELECTIONS
3.1 Compensation Deferrals 8
3.2 Crediting of Compensation Deferrals 9
3.3 Deemed Interest 9
3.4 Form of Payment 9
3.5 Normal Time for Payment 10
3.6 In-Service Withdrawals 10
SECTION 4 ACCOUNTING
4.1 Participants' Accounts 11
4.2 Participants Remain Unsecured Creditors 11
4.3 Accounting Methods 11
4.4 Reports 11
SECTION 5 DISTRIBUTIONS
5.1 Normal Time for Distribution 12
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5.1.1 Termination Date 12
5.1.2 Rules for Installment Payments 12
5.2 Special Rule for Disability 13
5.2.1 Amount of Additional Credited
Contributions 13
5.2.2 Time for Payment and Cessation of
Additional Credited Contributions 14
5.3 Death of the Participant 15
5.4 Beneficiary Designations 15
5.4.1 Changes 15
5.4.2 Failed Designations 15
5.5 Financial Hardship 16
5.6 Payments to Incompetents 16
5.7 Undistributable Accounts 16
5.8 Committee Discretion 17
SECTION 6 PARTICIPANT'S INTEREST IN ACCOUNT
6.1 Compensation Deferral Contributions 17
SECTION 7 ADMINISTRATION OF THE PLAN
7.1 Plan Administrator 18
7.2 Committee 18
7.3 Actions by Committee 18
7.4 Powers of Committee 18
7.5 Decisions of Committee 20
7.6 Administrative Expenses 20
7.7 Eligibility to Participate 20
7.8 Indemnification 20
SECTION 8 FUNDING
8.1 Unfunded Plan 21
SECTION 9 MODIFICATION OR TERMINATION OF PLAN
9.1 Employers' Obligations Limited 21
9.2 Right to Amend or Terminate 22
9.3 Disposition of Affiliates 22
9.4 Effect of Termination 23
SECTION 10 GENERAL PROVISIONS
10.1 Participation by Affiliates 23
10.2 Inalienability 24
10.3 Rights and Duties 24
10.4 No Enlargement of Employment Rights 24
10.5 Apportionment of Costs and Duties 24
10.6 Compensation Deferrals Not Counted Under
Other Employee Benefit Plans 25
10.7 Applicable Law 25
10.8 Severability 25
10.9 Captions 25
ii
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U.S. COMPUTER SERVICES
DEFERRED COMPENSATION PLAN
(EFFECTIVE SEPTEMBER 1, 1994)
U.S. COMPUTER SERVICES, a California corporation, hereby establishes
the U.S. Computer Services Deferred Compensation Plan, effective September 1,
1994, for the benefit of a select group of management employees of the Company
and its participating Affiliates, in order to provide such employees with
certain deferred compensation benefits. The Plan is an unfunded deferred
compensation plan that is intended to qualify for the exemptions provided in
sections 201, 301, and 401 of ERISA.
SECTION 1
DEFINITIONS
The following words and phrases shall have the following meanings
unless a different meaning is plainly required by the context:
1.1 "AFFILIATE" shall mean (a) the Company, and (b) each
corporation, trade or business which is, together with any Employer, a member
of a controlled group of corporations or an affiliated service group or under
common control (within the meaning of section 414(b), (c) or (m) of the Code),
but only for the period during which such other entity is so affiliated with
any Employer.
1.2 "BENEFICIARY" shall mean the person or persons entitled to
receive the balance credited to a Participant's Account under the Plan upon the
death of the Participant, as provided in Section 5.4.
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1.3 "BOARD OF DIRECTORS" shall mean the Board of Directors of the
Company, as constituted from time to time.
1.4 "CODE" shall mean the Internal Revenue Code of 1986, as amended.
Reference to a specific section of the Code shall include such section, any
valid regulation promulgated thereunder, and any comparable provision of any
future legislation amending, supplementing or superseding such section.
1.5 "COMMITTEE" shall mean the committee appointed by the Board of
Directors to administer the Plan. The members of the Committee shall serve at
the pleasure of the Board of Directors.
1.6 "COMPANY" shall mean U.S. Computer Services, a California
corporation.
1.7 "COMPENSATION" shall mean the base salary (including car
allowance) of a Participant, but reduced by welfare plan contributions and
deductions, elected deferrals and deductions (E.G., 401(k) contributions,
401(k) loan repayments, Section 125 flexible benefits deductions, and Company
cafeteria charges), and any other amounts required to be withheld for taxes or
otherwise (E.G., pursuant to an order for garnishment). A Participant's
Compensation shall not include any other type of remuneration.
1.8 "COMPENSATION DEFERRALS" shall mean the amounts credited to
Participants' Accounts under the Plan pursuant to their deferral elections made
in accordance with Section 2.1.
1.9 "DISABILITY" or "DISABLED" shall mean a physical or mental
impairment that (a) renders a Participant incapable of performing the functions
of his or her position for a period of two years, and (b) thereafter, based on
factors such as the
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Participant's education and training, renders him or her incapable of
performing work in any capacity. A Participant shall be Disabled only if he
or she is determined to be disabled by a third party or parties designated
from time to time by the Committee.
1.10 "ELIGIBLE EMPLOYEE" shall mean an employee of an Employer who
holds the title of Director or above. Notwithstanding the preceding, the Board
of Directors, in its sole discretion, may (a) change the required title for
purposes of determining eligibility for the Plan, and (b) determine that one or
more otherwise eligible employees of an Employer shall not be Eligible
Employees.
1.11 "EMPLOYERS" shall mean the Company and each of its Affiliates
that adopts the Plan with the approval of the Board of Directors. With respect
to an individual Participant, "EMPLOYER" shall mean the Company or its
Affiliate that (a) directly employs such Participant, and (b) has adopted the
Plan (with the approval of the Board of Directors).
1.12 "ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended. Reference to a specific section of ERISA shall include
such section, any valid regulation promulgated thereunder, and any comparable
provision of any future legislation amending, supplementing or superseding such
section.
1.13 "PARTICIPANT" shall mean an Eligible Employee who (a) has
become a Participant in the Plan pursuant to Section 2.1 and (b) has not ceased
to be a Participant pursuant to Section 2.3.
1.14 "PARTICIPANT'S ACCOUNT" or "ACCOUNT" shall mean
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<PAGE>
as to any Participant the separate account maintained on the books of the
Employers in order to reflect his or her interest under the Plan.
1.15 "PLAN" shall mean the U.S. Computer Services Deferred
Compensation Plan, as set forth in this instrument and as hereafter amended
from time to time.
1.16 "PLAN YEAR" shall mean the calendar year. Notwithstanding the
preceding, the 1994 Plan Year shall be the period September 1, 1994 (the
effective date of the Plan), through December 31, 1994.
SECTION 2
PARTICIPATION
2.1 PARTICIPATION. Each Eligible Employee's decision to become a
Participant shall be entirely voluntary.
2.1.1 INITIAL ELECTIONS BY CURRENT EMPLOYEES. An Eligible
Employee may elect to become a Participant in the Plan by electing, no later
than September 1, 1994, to make Compensation Deferrals under the Plan. An
election under this Section 2.1.1 to make Compensation Deferrals shall be
effective for the Plan Year beginning September 1, 1994, and for the Plan Year
beginning January 1, 1995.
2.1.2 INITIAL ELECTIONS BY NEW ELIGIBLE EMPLOYEES. Each
employee who becomes an Eligible Employee after August 24, 1994 (whether by
hire or promotion) may elect to become a Participant in the Plan by electing,
within 30 days of the date of his or her hire or promotion (as the case may
be), to make Compensation Deferrals under the Plan. An election under this
Section 2.1.2 to make Compensation Deferrals shall be
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effective (a) as of the first day of the first calendar month which begins
after the Eligible Employee has been such for 30 consecutive days, and (b)
for the immediately following Plan Year. Notwithstanding clause (b) of the
preceding sentence, prior to the beginning of such immediately following Plan
Year, and pursuant to such procedures as the Committee may specify from time
to time, the Eligible Employee may increase or decrease the amount of his or
her deferral for such Plan Year, provided that the Participant may not
decrease the amount of his or her deferral below the $5,000 minimum required
by Section 3.1.
2.1.3 ELECTIONS FOR SUBSEQUENT PLAN YEARS. An Eligible
Employee may elect to become a Participant (or to continue or reinstate his
or her active participation) in the Plan for any subsequent Plan Year by
electing, no later than December 31 of the preceding Plan Year, to make
Compensation Deferrals under the Plan. An election under this Section 2.1.3
to make Compensation Deferrals shall be effective only for the Plan Year with
respect to which the election is made.
2.1.4 NO ELECTION CHANGES DURING PLAN YEAR. A Participant
shall not be permitted to change or revoke his or her election for a Plan
Year after the beginning of such Plan Year, except that (a) pursuant to such
procedures as the Committee may specify from time to time, a Participant may
increase his or her deferrals for the remainder of the Plan Year (but only
with respect to Compensation that is not yet earned), (b) to the limited
extent provided in Sections 2.1.2 and 2.2, a Participant may change or revoke
his or her election, and (c) if a Participant's job changes to a position
which is ineligible for the Plan, his or her deferrals under the Plan shall
cease.
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2.1.5 SPECIFIC TIMING AND METHOD OF ELECTION. Notwithstanding
any contrary provision of this Section 2.1, the Committee, in its sole
discretion, shall determine the manner and deadlines for Participants to make
Compensation Deferral elections. The deadlines prescribed by the Committee
may be earlier than the deadlines specified in Sections 2.1.1, 2.1.2, and
2.1.3, but shall not be later than the deadlines prescribed in such Sections.
2.2 HARDSHIP SUSPENSION OF PARTICIPATION. In the event that a
Participant incurs a "financial hardship" (as defined in this Section 2.2),
the Committee, in its sole discretion, may suspend the Participant's
Compensation Deferrals for the remainder of the Plan Year. However, an
election to make Compensation Deferrals under Section 2.1 shall be
irrevocable as to amounts deferred as of the effective date of any suspension
in accordance with this Section 2.2. For purposes of the Plan, a "financial
hardship" shall mean a severe financial emergency which is caused by a sudden
and unexpected accident, illness or other event beyond the control of the
Participant which would, if no suspension of deferrals (or accelerated
distribution under Section 5.5) were made, result in severe financial burden
to the Participant or a member of his or her immediate family. Also, a
financial hardship does not exist to the extent that the hardship may be
relieved by (a) reimbursement or compensation by insurance, (b) liquidation
of the Participant's other assets (to the extent such liquidation would not
itself cause severe financial hardship), or (c) any loan available to the
Participant (to the extent the payments on such loan would not themselves
cause severe financial hardship).
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2.3 TERMINATION OF PARTICIPATION. An Eligible Employee who has
become a Participant shall remain a Participant until his or her entire
vested Account balance is distributed. However, an Eligible Employee who has
become a Participant may or may not be an active Participant making
Compensation Deferrals for a particular Plan Year, depending upon whether he
or she has elected to make Compensation Deferrals for such Plan Year.
SECTION 3
COMPENSATION DEFERRAL ELECTIONS
3.1 COMPENSATION DEFERRALS. At the times and in the manner
prescribed in Section 2.1, each Eligible Employee may elect to defer portions
of his or her Compensation and to have the amounts of such deferrals credited
to his or her Account under the Plan on the books of the Employer. For each
Plan Year, an Eligible Employee may elect to defer an amount equal to any
specific dollar amount (in whole dollar increments) of the Participant's
Compensation, provided that the percentage or dollar amount elected by the
Participant shall result in an expected deferral of not less than $5,000 of
his or her Compensation. Notwithstanding the preceding sentence, the minimum
deferral amount shall, in such manner as the Committee may determine from
time to time, be prorated (a) for the Plan Year beginning September 1, 1994,
and (b) with respect to each Participant who becomes a Participant under
Section 2.1.2, for his or her first year of active participation in the Plan.
Also, notwithstanding any contrary provision of the Plan, the Committee may
reduce a Participant's Compensation Deferrals to the extent necessary to
satisfy applicable withholding tax requirements and employee welfare plan
contributions.
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3.2 CREDITING OF COMPENSATION DEFERRALS. The amounts deferred
pursuant to Section 3.1 shall reduce the Participant's Compensation during
the Plan Year and shall be credited to the Participant's Account as of the
last day of the pay period in which the amounts (but for the deferral) would
have been paid to the Participant. For each Plan Year, the exact dollar
amount to be deferred from each Compensation payment shall be determined by
the Committee under such formulae as it shall adopt from time to time.
3.3 DEEMED INTEREST ON ACCOUNTS. The amount that is credited to
each Participant's Account shall be credited with deemed interest as of the
end of each calendar month. Deemed interest shall be credited at such
rate(s), and in accordance with such calculation methods, as the Board of
Directors, in its sole discretion, may determine from time to time.
3.4 FORM OF PAYMENT. Each Participant shall indicate on his or
her first deferral election made pursuant to Section 3.1 the form of payment
for his or her Account. A Participant may elect (a) a lump sum payment, (b)
five annual installment payments, (c) ten annual installment payments, or (d)
fifteen annual installment payments. On any subsequent deferral election
(I.E., an election for a subsequent Plan Year), each Participant may choose a
different form of payment (from the above choices); provided, however, that a
Participant may not choose a more rapid form of payment. A Participant's
last effective election shall apply to all amounts credited to the
Participant's Account, without regard to the Plan Year in which such amounts
are credited (except as provided in Section 3.6).
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3.5 NORMAL TIME FOR PAYMENT. Each Participant's Account shall be
distributed at the time(s) provided in Section 5, except as provided in
Section 3.6.
3.6 IN-SERVICE WITHDRAWALS. Notwithstanding any contrary
provision of the Plan, and pursuant to such procedures as the Committee may
adopt from time to time, a Participant may indicate on his or her deferral
election (made pursuant to Section 3.1) the time for payment of all or a
portion of the Compensation Deferrals to be made for the specific Plan Year
covered by such deferral election. Payment of the principal amount of such
deferrals will be made in four equal installments, commencing on the date
elected by the Participant. Payment of the deemed interest on such deferrals
will be made at the time provided in Section 5 (with the remaining balance,
if any, credited to the Participant's Account). A Participant may elect to
commence receiving payment of the principal amount of the deferrals after any
whole number of calendar years (not less than five) specified by the
Participant in his or her deferral election. A Participant's election as to
the time for commencement of payment shall be irrevocable and shall apply to
the elected portion of the amounts credited to the Participant's Account
during the Plan Year with respect to which the election is made, provided
that if the Participant terminates employment prior to the final scheduled
payment under this Section 3.6, distribution of the entire remaining balance
credited to his or her Account shall instead be made in the time and manner
provided in Section 5.
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SECTION 4
ACCOUNTING
4.1 PARTICIPANTS' ACCOUNTS. At the direction of the Committee, there
shall be established and maintained on the books of the Employer, a separate
Account for each Participant to which shall be credited all Compensation
Deferrals made by the Participant, and deemed interest on such Compensation
Deferrals.
4.2 PARTICIPANTS REMAIN UNSECURED CREDITORS. All amounts credited
to a Participant's Account under the Plan shall continue for all purposes to be
a part of the general assets of the Employer. Each Participant's interest in
the Plan shall make him or her only a general, unsecured creditor of the
Employer.
4.3 ACCOUNTING METHODS. The accounting methods or formulae to be used
under the Plan for the purpose of maintaining the Participants' Accounts,
including the calculation and crediting of deemed interest, shall be
determined by the Committee, in its sole discretion. The accounting methods
or formulae selected by the Committee may be revised from time to time.
4.4 REPORTS. Each Participant shall be furnished with periodic
statements of his or her Account, reflecting the status of his or her
interest in the Plan, at least annually.
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SECTION 5
DISTRIBUTIONS
5.1 NORMAL TIME FOR DISTRIBUTION. Subject to Sections 3.6, 5.2, and
5.3, distribution of the balance credited to a Participant's Account shall
commence no later than January 15 of the Plan Year following the
Participant's "termination date" (as defined in Section 5.1.1).
5.1.1 TERMINATION DATE. A Participant's "termination date" means
the date of the Participant's termination of employment with all Employers
and Affiliates for any reason, except as provided in the following sentence.
However, if (a) the Participant's termination of employment with all
Employers and Affiliates occurs on account of the sale of the stock or assets
of the Affiliate employing the Participant, or due to a spin-off, split-up or
other similar change in the capital structure of the Affiliate, and (b) the
Participant continues in employment with the new non-Affiliate (or its
successor), then the Participant's "termination date" means the date of the
Participant's termination of employment for any reason from such
non-Affiliate.
5.1.2 RULES FOR INSTALLMENT PAYMENTS. If, pursuant to Section
3.4, the Participant elected to receive five, ten or fifteen annual
installment payments, his or her first installment shall be equal to 1/5th,
1/10th, or 1/15th (respectively) of the balance then credited to his or her
Account. Each subsequent annual installment shall be paid to the Participant
as near as administratively practicable to each anniversary of the first
installment payment. The amount of each subsequent installment shall be
equal to the balance then
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credited to the Participant's Account, divided by the number of installments
remaining to be made. While a Participant's Account is in installment payout
status, the unpaid balance credited to the Participant's Account shall
continue to be credited with deemed interest under Section 3.3.
5.2 SPECIAL RULE FOR DISABILITY. If a Participant becomes Disabled
prior to his or her termination of employment with all Employers and
Affiliates, the balance then credited to his or her Account shall be
distributed to him or her at the time specified in Section 5 and in the form
and manner elected under Section 3.4. In addition, if at the time of
commencement of Disability, the Participant (a) is actively making
Compensation Deferrals, and (b) is at least age 19, but not older than age
59, then as provided in Sections 5.2.1 and 5.2.2, his or her Account shall be
credited with special contributions for each Plan Year during which the
Disability exists.
5.2.1 AMOUNT OF ADDITIONAL CREDITED CONTRIBUTIONS. For a
Participant who becomes Disabled when he or she is at least age 19, but less
than age 26, the amount of additional contributions for each Plan Year shall
equal the amount of his or her last elected Compensation Deferral, but in no
event shall the additional contribution exceed $35,000 per Plan Year. For a
Participant who becomes Disabled when he or she is at least age 26, but less
than age 41, the amount of additional contributions for each Plan Year shall
equal the amount of his or her last elected Compensation Deferral, but in no
event shall the additional contribution exceed $40,000 per Plan Year. For a
Participant who becomes Disabled when he or she is at least age 41, but not
older than age 59, the amount of
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additional contributions for each Plan Year shall equal the amount of his or
her last elected Compensation Deferral, but in no event shall the additional
contribution exceed $50,000 per Plan Year.
5.2.2 TIME FOR PAYMENT AND CESSATION OF ADDITIONAL CREDITED
CONTRIBUTIONS. Within 30 days of the date that the Participant terminates
employment on account of becoming Disabled, he or she shall elect a form of
payment for any additional contributions credited under this Section 5.2. A
Participant may elect (a) a lump sum payment, (b) five annual installment
payments, (c) ten annual installment payments, or (d) fifteen annual
installment payments. The time for payment (or, in the case of installments,
commencement of payment) shall be the Participant's 65th birthday (or, if the
Participant dies prior to his or her 65th birthday, January 15 of the Plan
Year following the Plan Year in which the death occurs). All additional
contributions under this Section 5.2 shall cease upon the earlier of (a) the
date that the Participant ceases to be Disabled, or (b) the date that the
entire balance credited to the Participant's Account has been distributed.
5.3 DEATH OF THE PARTICIPANT. If a Participant dies, the balance then
credited to his or her Account shall be distributed to his or her Beneficiary
or Beneficiaries, in the same form and manner elected by the Participant
under Sections 3.4 and 3.6.
5.4 BENEFICIARY DESIGNATIONS. Each Participant may, pursuant to such
procedures as the Committee may specify, designate one or more Beneficiaries.
Primary and secondary Beneficiaries are permitted.
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5.4.1 CHANGES. A Participant may designate different
Beneficiaries (or may revoke a prior Beneficiary designation) at any time by
delivering a new designation (or revocation of a prior designation) in like
manner. Any designation or revocation shall be effective only if it is
received by the Committee. However, when so received, the designation or
revocation shall be effective as of the date the notice is executed (whether
or not the Participant still is living), but without prejudice to the
Committee on account of any payment made before the change is recorded. The
last effective designation received by the Committee shall supersede all
prior designations.
5.4.2 FAILED DESIGNATIONS. If a Participant dies without
having effectively designated a Beneficiary, or if no Beneficiary (primary or
secondary) survives the Participant, the Participant's Account shall be
payable to his or her surviving spouse, or, if the Participant is not
survived by his or her spouse, the Account shall be paid to his or her estate.
5.5 FINANCIAL HARDSHIP. In the event that a Participant incurs a
"financial hardship" (as defined in Section 2.2), the Committee, in its sole
discretion and notwithstanding any contrary provision of the Plan, may
determine that all or part of the Participant's Account shall be paid to him
or her immediately; provided, however, that the amount paid to the
Participant pursuant to this Section 5.5 shall be limited to the amount
reasonably necessary to alleviate the Participant's hardship. Also, payment
under this Section 5.5 may not be made to the extent that the hardship may be
relieved by suspension of the Participant's Compensation Deferrals in
accordance with
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Section 2.2.
5.6 PAYMENTS TO INCOMPETENTS. If any individual to whom a benefit is
payable under the Plan is a minor or legally incompetent, the Committee shall
determine whether payment shall be made directly to the individual, any
person acting as his or her custodian or legal guardian under the California
Uniform Transfers to Minors Act, his or her legal representative or a near
relative, or directly for his or her support, maintenance or education.
5.7 UNDISTRIBUTABLE ACCOUNTS. Each Participant and (in the event of
death) his or her Beneficiary shall keep the Committee advised of his or her
current address. If the Committee is unable to locate the Participant or
Beneficiary to whom a Participant's Account is payable under this Section 5,
the Participant's Account shall continue to be credited with deemed interest
in accordance with Section 3.3. Accounts that, in accordance with the
preceding sentence, have been undistributable for a period of 35 months shall
be forfeited as of the end of the 35th month. If a Participant whose Account
was forfeited under this Section 5.7 (or his or her Beneficiary) files a
claim for distribution of the Account after the date that it was forfeited,
and if the Committee determines that such claim is valid, then the forfeited
balance shall be paid by the Employer in a lump sum cash payment as soon as
practicable thereafter.
5.8 COMMITTEE DISCRETION. Within the specific time periods described
in this Section 5, the Committee shall have sole discretion to determine the
specific timing of the payment of any Account balance under the Plan.
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SECTION 6
PARTICIPANT'S INTEREST IN ACCOUNT
6.1 COMPENSATION DEFERRAL CONTRIBUTIONS. Subject to Sections 8.1
(relating to creditor status) and 9.2 (relating to amendment and/or termination
of the Plan), a Participant's interest in the balance credited to his or her
Account at all times shall be 100% vested and nonforfeitable.
SECTION 7
ADMINISTRATION OF THE PLAN
7.1 PLAN ADMINISTRATOR. The Company is hereby designated as the
administrator of the Plan (within the meaning of section 3(16)(A) of ERISA).
7.2 COMMITTEE. The Plan shall be administered by the Committee.
The Committee shall have the authority to control and manage the operation and
administration of the Plan. Any member of the Committee may resign at any time
by notice in writing mailed or delivered to the Secretary of the Company.
7.3 ACTIONS BY COMMITTEE. Each decision of a majority of the
members of the Committee then in office shall constitute the final and binding
act of the Committee. The Committee may act with or without a meeting being
called or held and shall keep minutes of all meetings held and a record of all
actions taken by written consent.
7.4 POWERS OF COMMITTEE. The Committee shall have all powers and
discretion necessary or appropriate to supervise the administration of the Plan
and to control its operation in accordance with its terms, including, but not
by way of
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limitation, the following discretionary powers:
(a) To interpret and determine the meaning and validity of the
provisions of the Plan and to determine any question arising under, or in
connection with, the administration, operation or validity of the Plan or
any amendment thereto;
(b) To determine any and all considerations affecting the
eligibility of any employee to become a Participant or remain a
Participant in the Plan;
(c) To cause one or more separate Accounts to be maintained for each
Participant;
(d) To cause Compensation Deferrals and deemed interest to be
credited to Participants' Accounts;
(e) To establish and revise an accounting method or formula for the
Plan, as provided in Section 4.3;
(f) To determine the manner and form in which any distribution is to
be made under the Plan;
(g) To determine the status and rights of Participants and their
spouses, Beneficiaries or estates;
(h) To employ such counsel, agents and advisers, and to obtain such
legal, clerical and other services, as it may deem necessary or
appropriate in carrying out the provisions of the Plan;
(i) To establish, from time to time, rules for the performance of
its powers and duties and for the administration of the Plan;
(j) To arrange for annual distribution to each Participant of a
statement of benefits accrued under the Plan;
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(k) To publish a claims and appeal procedure satisfying the minimum
standards of section 503 of ERISA pursuant to which individuals or estates
may claim Plan benefits and appeal denials of such claims;
(l) To delegate to any one or more of its members or to any other
person, severally or jointly, the authority to perform for and on behalf
of the Committee one or more of the functions of the Committee under the
Plan; and
(m) to decide all issues and questions regarding Account balances,
and the time, form, manner and amount of distributions to Participants.
7.5 DECISIONS OF COMMITTEE. All actions, interpretations, and
decisions of the Committee shall be conclusive and binding on all persons, and
shall be given the maximum possible deference allowed by law.
7.6 ADMINISTRATIVE EXPENSES. All expenses incurred in the
administration of the Plan by the Committee, or otherwise, including legal fees
and expenses, shall be paid and borne by the Employers.
7.7 ELIGIBILITY TO PARTICIPATE. No member of the Committee who is
also an employee of an Employer shall be excluded from participating in the
Plan if otherwise eligible, but he or she shall not be entitled, as a member of
the Committee, to act or pass upon any matters pertaining specifically to his
or her own Account under the Plan.
7.8 INDEMNIFICATION. Each of the Employers shall, and hereby does,
indemnify and hold harmless the members of the Committee, from and against any
and all losses, claims, damages or liabilities (including attorneys' fees and
amounts paid, with
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the approval of the Board of Directors, in settlement of any claim) arising
out of or resulting from the implementation of a duty, act or decision with
respect to the Plan, so long as such duty, act or decision does not involve
gross negligence or willful misconduct on the part of any such individual.
SECTION 8
FUNDING
8.1 UNFUNDED PLAN. All amounts credited to a Participant's
Account under the Plan shall continue for all purposes to be a part of the
general assets of the Employer. The interest of the Participant in his or
her Account, including his or her right to distribution thereof, shall be an
unsecured claim against the general assets of the Employer. Nothing
contained in the Plan shall give any Participant or beneficiary any interest
in or claim against any specific assets of the Employer.
SECTION 9
MODIFICATION OR TERMINATION OF PLAN
9.1 EMPLOYERS' OBLIGATIONS LIMITED. The Employers intend to
continue the Plan indefinitely, and to maintain each Participant's Account
until it is scheduled to be paid to him or her in accordance with the
provisions of the Plan. However, the Plan is voluntary on the part of the
Employers, and the Employers do not guarantee to continue the Plan. The
Company at any time may, by amendment of the Plan, suspend Compensation
Deferrals or may discontinue Compensation Deferrals, with or without cause.
Complete discontinuance of all Compensation Deferrals shall be deemed a
termination of the Plan.
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9.2 RIGHT TO AMEND OR TERMINATE. The Board of Directors reserves
the right to alter, amend or terminate the Plan, or any part thereof, in such
manner as it may determine, at any time and for any reason.
9.3 DISPOSITION OF AFFILIATES. Notwithstanding any contrary
provision of the Plan, in the event that one or more Participants transfer
employment to a non-Affiliate pursuant to an agreement regarding the sale of
the stock or assets of an Affiliate, or a spin-off, split-up or other change
in the capital structure of an Affiliate (each, an "affected Participant"),
the Board of Directors, in its sole discretion, may determine that (a) the
liability for amounts credited to an affected Participant's Account shall be
assigned or transferred to such non-Affiliate (or an affiliate thereof), and
upon acceptance by the non-Affiliate (or affiliate thereof) of such
liability, no Employer shall have any liability under the Plan to such
affected Participant, or (b) the amounts credited to an affected
Participant's Account shall be distributed to him or her (in a single lump
sum) no later than January 15 of the Plan Year following the affected
Participant's termination of employment with all Employers and Affiliates.
9.4 EFFECT OF TERMINATION. If the Plan is terminated pursuant to
this Section 9, the balances credited to the Accounts of the affected
Participants shall be distributed to them at the time and in the manner set
forth in Section 5; provided, however, that the Committee, in its sole
discretion, may authorize accelerated distribution of Participants' Accounts
as of any earlier date.
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SECTION 10
GENERAL PROVISIONS
10.1 PARTICIPATION BY AFFILIATES. One or more Affiliates of the
Company may become participating Employers by adopting the Plan and obtaining
approval for such adoption from the Board of Directors. By adopting the
Plan, an Affiliate shall be deemed to agree to all of its terms, including
(but not limited to) the provisions granting exclusive authority (a) to the
Board of Directors to amend the Plan, and (b) to the Committee to administer
and interpret the Plan. Any Affiliate may terminate its participation in the
Plan at any time. The liabilities incurred under the Plan to the
Participants employed by each Employer shall be solely the liabilities of
that Employer, and no other Employer shall be liable for benefits accrued by
a Participant during any period when he or she was not employed by such
Employer. A list of participating Employers, and the effective dates of
their participation, is attached hereto as Appendix A.
10.2 INALIENABILITY. In no event may either a Participant, a
former Participant or his or her Beneficiary, spouse or estate sell,
transfer, anticipate, assign, hypothecate, or otherwise dispose of any right
or interest under the Plan; and such rights and interests shall not at any
time be subject to the claims of creditors nor be liable to attachment,
execution or other legal process. Accordingly, for example, a Participant's
interest in the Plan is not transferable pursuant to a domestic relations
order.
10.3 RIGHTS AND DUTIES. Neither the Employers nor the
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Committee shall be subject to any liability or duty under the Plan except as
expressly provided in the Plan, or for any action taken, omitted or suffered
in good faith.
10.4 NO ENLARGEMENT OF EMPLOYMENT RIGHTS. Neither the
establishment or maintenance of the Plan, the making of any Compensation
Deferrals nor any action of any Employer or the Committee, shall be held or
construed to confer upon any individual any right to be continued as an
employee of the Employer nor, upon dismissal, any right or interest in any
specific assets of the Employers other than as provided in the Plan. Each
Employer expressly reserves the right to discharge any employee at any time.
10.5 APPORTIONMENT OF COSTS AND DUTIES. All acts required of the
Employers under the Plan may be performed by the Company for itself and its
Affiliates, and the costs of the Plan may be equitably apportioned by the
Committee among the Company and the other Employers. Whenever an Employer is
permitted or required under the terms of the Plan to do or perform any act,
matter or thing, it shall be done and performed by any officer or employee of
the Employer who is thereunto duly authorized by the board of directors of
the Employer.
10.6 COMPENSATION DEFERRALS NOT COUNTED UNDER OTHER EMPLOYEE
BENEFIT PLANS. Compensation Deferrals under the Plan will not be considered
for purposes of contributions or benefits under any other employee benefit
plan sponsored by the Employers.
10.7 APPLICABLE LAW. The provisions of the Plan shall be
construed, administered and enforced in accordance with ERISA, and to the
extent not preempted by ERISA, with the laws of the State of California.
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10.8 SEVERABILITY. If any provision of the Plan is held invalid
or unenforceable, its invalidity or unenforceability shall not affect any
other provisions of the Plan, and in lieu of each provision which is held
invalid or unenforceable, there shall be added as part of the Plan a
provision that shall be as similar in terms to such invalid or unenforceable
provision as may be possible and be valid, legal, and enforceable.
10.9 CAPTIONS. The captions contained in and the table of
contents prefixed to the Plan are inserted only as a matter of convenience
and for reference and in no way define, limit, enlarge or describe the scope
or intent of the Plan nor in any way shall affect the construction of any
provision of the Plan.
EXECUTION
IN WITNESS WHEREOF, U.S. Computer Services, by its duly authorized
officer, has executed this Plan on the date indicated below.
U.S. COMPUTER SERVICES
Dated: September 1, 1994 By /James C. Castle/
Title: Chairman & CEO
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APPENDIX A
LIST OF PARTICIPATING EMPLOYERS
Effective Date
Employer of Participation
-------- ----------------
1. U.S. Computer Services September 1, 1994
<PAGE>
U.S. COMPUTER SERVICES
DEFERRED COMPENSATION PLAN
AMENDMENT NO. 1
WHEREAS, U.S. Computer Services ("Company") maintains the U.S. Computer
Services Deferred Compensation Plan ("Plan") for the benefit of its eligible
Employees; and
WHEREAS, it is desirable to amend the Plan to clarify certain Plan
provisions;
NOW, THEREFORE, the Plan is hereby amended as follows:
1. Section 3.2 of the Plan is restated to read as follows, effective as of
September 1, 1994:
3.2 CREDITING OF COMPENSATION DEFERRALS. The amounts deferred
pursuant to Section 3.1 shall reduce the Participant's Compensation
during the Plan Year and shall be credited to the participant's
Account no later than the last day of the pay period in which the
amounts (but for the deferral) would have been paid to the
Participant. For each Plan Year, the exact dollar amount to be
deferred from each Compensation payment shall be determined by the
Committee under such formulae as it shall adopt from time to time.
2. Subsection 5.1.2 of the Plan is restated to read as follows, effective as
of September 1, 1994:
5.1.2 RULES FOR INSTALLMENT PAYMENTS. If, pursuant to Section 3.4, the
Participant elected to receive five, ten or fifteen annual installment
payments, each annual installment paid to the participant shall be of
an equal amount. The amount of each installment shall be calculated
(a) on the basis of an annual annuity with a term of years equal to
the number of installments elected by the Participant, and (b) using
an annual interest rate which is the arithmetic mean of the annual
interest rates credited to the Participant's Account during each of
the three years preceding the year in which the first installment
payment is made. After the first installment is paid, each subsequent
annual installment shall be paid to the Participant as near as
administratively practicable to each anniversary of the first
installment payment.
3. Section 5.3 of the Plan is restated to read as follows, effective as of
September 1, 1994:
5.3 DEATH OF THE PARTICIPANT. If a Participant (a) dies, and (b) prior to
his or her death, the Participant terminated employment with all
Employers and Affiliates, the balance then credited to his or her
Account shall be distributed to his or her Beneficiary or
Beneficiaries, at the time specified in Section 5.1 and in the form
and manner elected by the Participant under Section 3.4. If a
Participant dies while he or she is an employee of an Employer or
Affiliate, his or her Beneficiary or Beneficiaries shall be paid a
<PAGE>
survivor benefit as provided in Section 5.3.1 and 5.3.1 (in lieu of
the payment provided in the preceding sentence).
5.3.1 AMOUNT OF SURVIVOR BENEFIT. The total amount of any survivor
benefit shall be determined under such formula or formulae as
the Committee. (in its discretion) shall determine from time to
time. The formula or formulas determined by the Committee shall
take into account the amount of the Participant's Compensation
Deferrals for the year of the Participant's death, the balance
credited to the Participant's Account at the time of his or her
death, the rate for crediting deemed interest (under Section
3.3) in effect for the year of the Participant' death, the
Participant's "projected retirement date" and such other
factors as the Committee (in its discretion) shall determine
from time to time. For purposes of this Section 5.3.1, a
Participant's projected retirement date means (a) the date on
which the Participant would have attained age 60, but only if
the Participant died prior to attaining age 50, (b) the date on
which the Participant would have attained age 65, but only if
the Participant died after attaining age 50 and before
attaining age 60, or (c) the date on which the Participant
would have (or actually) attained ago 70, but only if the
Participant died after attaining age 60.
5.3.2 TIME FOR PAYMENT OF SURVIVOR BENEFIT. Any survivor benefit
payable to a Beneficiary or Beneficiaries shall be paid at the
time specified in Section 5.1 and in the form and manner elected
by the Participant under Section 3.4 for distribution of his or
her Account.
IN WITNESS WHEREOF, the Company, by its duly authorized officer, has executed
this Amendment No. 1 on the date indicated below.
U.S. COMPUTER SERVICES
Date: December 12, 1995 /Mary G. Jordan/
----------------------------------
Mary G. Jordan
Vice President, General Counsel
and Secretary
<PAGE>
AMENDMENT NO. 2 TO THE
U.S. COMPUTER SERVICES DEFERRED COMPENSATION PLAN
USCS International, Inc. (formerly, U.S. Computer Services) (the
"Company"), having established the U.S. Computer Services Deferred
Compensation Plan effective as of September 1, 1994 (the "Plan"), hereby
amends the Plan, effective as of May 31, 1996, as follows:
1. Each reference in the Plan to "U.S. Computer Services" is deleted
and replaced with the reference "USCS International, Inc. (formerly, U.S.
Computer Services)".
2. Section 1.6 is amended in its entirety to read as follows:
1.6 "COMPANY" shall mean USCS International, Inc. (formerly, U.S.
Computer Services), a Delaware corporation.
3. Section 1.15 is amended in its entirety to read as follows:
1.15 "PLAN" shall mean the USCS International, Inc. Deferred
Compensation Plan (formerly, the U.S. Computer Services Deferred
Compensation Plan), as set forth in this instrument and as hereafter
amended from time to time.
4. The reference in Appendix A to "U.S. Computer Services" is deleted
and replaced with the reference "USCS International, Inc. (formerly, U.S.
Computer Services)".
<PAGE>
IN WITNESS WHEREOF, the Company, by its duly authorized officer, has
executed this Amendment No. 2 on the date indicated below.
USCS INTERNATIONAL, INC.
Date: August 20, 1997 /Deborah Beitz/
--------- - -------------------------------
Title: Director of Benefits
<PAGE>
EXHIBIT 5.1
[LETTERHEAD]
August 29, 1997
USCS International, Inc.
2969 Prospect Park Drive
Rancho Cordova, California 95670
Gentlemen:
You have requested our opinion as counsel for USCS International, Inc., a
Delaware corporation (the "Company"), in connection with the registration under
the Securities Act of 1933, as amended (the "Securities Act"), and the Rules and
Regulations promulgated thereunder, of obligations ("Obligations") under the
Company's Bonus Deferral Plan and the Company's Deferred Compensation Plan
(collectively the "Plans").
This opinion is rendered pursuant to Item 601(b)(5)(i) of Regulation S-K
promulgated under the Securities Act.
For purposes of this opinion, we have examined the Registration Statement on
Form S-8 to be filed with the Commission on or about August 29, 1997 (the
"Registration Statement"). We have also been furnished with and have examined
originals or copies, certified or otherwise identified to our satisfaction, of
all such records of the Company, agreements and other instruments, certificates
of officers and representatives of the Company, certificates of public officials
and other documents as we have deemed it necessary as a basis for the opinions
hereafter expressed. As to questions of fact material to such opinions, we
have, where relevant facts were not independently established, relied upon
certifications by principal officers of the Company. We have made such further
legal and factual examination and investigation as we deem necessary for
purposes of rendering the following opinions.
In our examination we have assumed the genuineness of all signatures, the legal
capacity of natural persons, the correctness of facts set forth in certificates,
the authenticity of all documents submitted to us as originals, the conformity
to original documents of all documents submitted to us as certified or
photostatic copies, and the authenticity of the originals of such copies. We
have also assumed that such documents have each been duly authorized, properly
executed and delivered by each of the parties thereto other than the Company.
We are members of the Bar of the State of California. Our opinions below are
limited to the laws of the State of California and the federal securities laws
of the United States.
Based on the foregoing, it is our opinion that the Plans have been duly and
validly authorized and adopted, and the Obligations issued or to be issued
under the Plans will be valid and binding obligations of the Company,
enforceable in accordance with their terms, except as enforcement thereof may
be limited by bankruptcy, insolvency or other laws of general applicability
relating to or affecting enforcement of creditors' rights or by general
principles of equity.
We consent to the filing of this opinion as an exhibit to the Registration
Statement.
Very truly yours,
/s/ Graham & James LLP
GRAHAM & JAMES LLP
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated February 14, 1997, appearing on
page 21 of USCS International, Inc.'s Annual Report on Form 10-K.
/s/ Price Waterhouse LLP
------------------------
Price Waterhouse LLP
Sacramento, California
August 29, 1997
